News Corp. earned $839 million, or 32 cents per share, in the fiscal third quarter, which ended March 31. That was down 69 percent from a year earlier, when it recorded a huge gain on the sale of its stake in a technology company. That resulted in a net income of $2.7 billion, or $1.04 per share, last year.

But News Corp.'s operating income, which doesn't include that accounting impact, grew 55 percent to $1.25 billion from $810 million a year earlier.

Although News Corp. expects the current quarter to be weaker, with lower results from the movie studio, the strong third-quarter results prompted the company to raise its annual profit forecast. It now expects its operating profit to increase in the "high 20 percent range." In February the company said it foresaw a rise in the "low 20 percent range."

"We do feel good, not just about this quarter, but about the rest of the year and beyond," Murdoch said on a conference call with financial analysts and reporters.

Revenue rose 19 percent to $8.79 billion, thanks to a $1 billion uptick from the 20th Century Fox movie studio, which benefited from the release of "Avatar." Revenue in the year-earlier period was $7.37 billion.

Excluding a one-time gain of 3 cents per share related to the partial sale of a stake in British broadcaster ITV, adjusted earnings came to about 29 cents per share.

That beat the expectation of analysts polled by Thomson Reuters, who had predicted earnings of 23 cents per share on revenue of $8.18 billion. Analysts typically exclude one-time items from their estimates.

News Corp.'s most widely held class A shares initially jumped 4 percent in after-hours trading but then were down nearly more than 3 percent, or 48 cents, at $14.92. Before the earnings release the shares closed regular trading at $15.40, a drop of 64 cents, or 4 percent, on the day.

"Avatar," the 3-D epic from James Cameron, has become the highest grossing film in history, with $2.7 billion in worldwide ticket sales. It helped push the studio unit's operating income to a record $497 million, up 76 percent from a year earlier.

The company's newspaper division, which owns The Wall Street Journal, also saw income soar to $131 million, more than quadruple the $29 million posted a year ago. Lower costs — and a 25 percent jump in ad revenue at the Journal — led to the improvement.

The News Corp. segment that includes flagging social networking site MySpace lost $150 million compared with an $88 million loss a year earlier.

In its fiscal third quarter last year, News Corp. benefited from a $1.2 billion gain from the partial sale of its ownership stake in NDS, a technology company that delivers video signals to pay TV subscribers. It also posted a $1.2 billion non-cash tax benefit in last year's period.